Public Bill Committee

[Mr. Eric Martlew in the Chair]

Eric Martlew: Before we begin, I have a few announcements. It is customary at this stage to tell Members that they can take off their jackets if they wish. If you wish to put your overcoats on today, I do not mind. Please ensure that you turn off any electrical devices, or put them on silent.
Members are reminded that there is a money resolution in connection with the Bill, copies of which are available in the room. I remind Members that they should give adequate notice of amendments. To be eligible for selection at a Tuesday sitting, amendments must be tabled by the rise of the House on the previous Thursday. For a Thursday sitting, amendments must be tabled by the previous Monday. As a general rule, my co-Chairman and I will not take starred amendments.
Not everyone is familiar with the procedures for taking oral evidence in Public Bill Committees so it might be helpful if I explain briefly how we will proceed. The Committee will first be asked to consider the programme motion on the amendment paper. That debate is limited to half an hour. We will proceed to a motion to report written evidence and a motion to permit the Committee to deliberate in private in advance of the oral evidence, which I hope we can take formally. Assuming that the three motions are agreed, the Committee will move into private session. Once the Committee has deliberated, witnesses and members of the public will be invited back into the room and the oral evidence session will commence at about 9.30 am.
If the Committee agrees to the programme motion, it will hear oral evidence today and revert to more formal clause-by-clause scrutiny next week. We expect to hear from all or the majority of the witnesses today, weather permitting. If there are gaps in the programme, we will have to be flexible and may have to amend the programme motion to take account of them.

Huw Irranca-Davies: I beg to move,
That
(1) the Committee shall (in addition to its first meeting at 9.00 am on Thursday 7 January) meet
(a) at 1.00 pm on Thursday 7 January;
(b) at 10.30 am and 4.00 pm on Tuesday 12 January;
(c) at 9.00 am and 1.00 pm on Thursday 14 January;
(d) at 10.30 am and 4.00 pm on Tuesday 19 January;
(e) at 9.00 am and 1.00 pm on Thursday 21 January;
(2) the Committee shall hear oral evidence in accordance with the following Table:
TABLE

Date

Time

Witness
Thursday 7 January
Until no later than 10.25 am
Department for Environment, Food and Rural Affairs
Thursday 7 January
Until no later than 2.00 pm
Environment Agency; Local Government Association; Local Government Flood Forum; Local Government Information Unit
Thursday 7 January
Until no later than 3.00 pm
National Farmers Union; Association of Drainage Authorities; Association of British Insurers; Royal Society for the Protection of Birds; Woodland Trust; National Flood Forum
Thursday 7 January
Until no later than 4.00 pm
Water Services Regulation Authority (OFWAT); Water UK; Consumer Council for Water
(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 30; Schedule 1; Clause 31; Schedule 2; Clause 32; Schedule 3; Clause 33; Schedule 4; Clause 34; Schedule 5; Clauses 35 to 46; new Clauses; new Schedules; remaining proceedings on the Bill;
(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 21 January.
The Bill has received all the usual forms of scrutiny. A draft Bill, which was much wider than the current Bill, was published on 21 April. Consultation closed on 24 July. The Environment, Food and Rural Affairs Committee scrutinised the draft Bill and produced a report on 23 September. We are bringing forward the most pressing elements of that package in the Bill.
The Bill will deliver the measures needed to implement Sir Michael Pitts review of the 2007 floods. It will put in place much needed changes on water policy to protect water resources and services to customers. In short, the Bill is Pitt and pithy.
We have listened and then adapted and improved the Bill. For example, it will give new environmental powers to the Environment Agency and local authorities. Flood risk management authorities will have a new sustainability duty, similar to that of the Environment Agency.
Anna Walker published a report on charging and metering last month. Her review, and that of Martin Cave, raise significant and complex issues. Those are being addressed, but that should not be rushed.
The most pressing policy issues, including those that have come to prominence since the publication of the draft Bill, such as concessionary schemes for surface water drainage charges, are included in the Bill. Given the widespread support for tackling bad debt in the water industry, I will produce the necessary legislation on that issue as soon as parliamentary time allows. We firmly intend to bring forward legislation on all remaining issues set out in the April consultation paper. However, we simply cannot do them full justice now. I think that we should avoid debating matters that do not need to be legislated on now.
I want to address one particular issue in the Bill that is of widespread concern. We have undertaken to ensure that local authorities are properly funded for the activities they are to take on under the Bill. We believe that it is highly unlikely that authorities will be underfunded or spend more than our assessment suggests. On all matters, including private sewers, we have taken full estimates of the costs and the conservative estimates of the savings, but we have undertaken to keep those costs and the assumptions underpinning them under review and, importantly, address shortfalls if they arise.
Furthermore, we are exploring the options for the long-term funding of the SUDSsustainable drainage systemsmaintenance. We will publish a clear way forward that takes account of circumstances faced by local authorities and developers in time for the implementation of the legislation set out in the Bill. That will ensure that local authorities will be able to implement SUDS with full certainty that there will be no gap in funding. I know that the funding is of critical importance to the Committee, and that has already been considered in the settlement working group, on which the Local Government Association is represented, so we can get a fair outcome there. That does not require legislation, so we do not need to delay debate on other matters.
I am pleased to say that the Bill, and particularly its flood management provisions, has broad support across the political spectrum, both in and outside Parliament. It will obviously be a great disappointment to people if we do not get it on the statute book in time in what is a necessarily short Session. I am looking forward to working with Committee members, many of whom have experienced at first hand the impact of flooding on their constituents, and to keeping the pace and focus we have already established. We have discussed the programme motion and I think that we have adequate time to do justice to the Bill.

Eric Martlew: The motion will be debated for the first half hour.

Anne McIntosh: Now that the Minister has made an opening statement, I would like to say a few words, not on the programme motion, but on the inadequate time we have for debate. I regret that we lost two evidence sessions

Eric Martlew: That is the programme motion, so you are in order.

Anne McIntosh: Thank you. I regret that the Minister withdrew two of the scrutiny sessions and think that in time it will emerge that we needed them. I hope that the Committee can co-operate to consider as many of the important aspects of the Bill as possible in the limited time available.
The Minister referred to bad debt. Why does he feel that separate legislation is needed? There is, I believe, scope for political agreement on that issue, so why can we not agree on the wording of an amendment in that regard? If he is willing, we are prepared to table an amendment along those lines. As he is aware, there is also an issue relating to two-tier local government, rather than the unitary level of government, about which tier is best placed to apply and adapt the risk management strategy. There is scope for an element of flexibility, and I hope that he will agree that we should leave it to the local councils to agree. The issue, in a nutshell, is that the district councils are responsible for planning permission, and therefore directly involved in setting up the SUDS, but in fact the county council, in a strict interpretation of the Bill, will lead.
On the whole question of SUDS, I think that the Minister now might have an opportunity to explain why there is nothing in the Bill on the history of SUDS, what the present legislation relating to them is and what regime covers them. I agree entirely with him that the issue of resources is absolutely fundamental if the Bill is to be a success. He needs to set out in the limited time available how he will be able to do that. What new resources will be made available to his strong environmental agency team that is supporting him on the Bill and to local government?
I challenge the Minister, formally, on his sums. As private drains are currently not maintained by local authorities, I do not see where the savings he has costed will come from. My understanding is that private drains are the responsibility of their owners, and the owners of the drains are not, for the most part, the local authorities. I think that he is on the back foot with regard to the financing and resources available. We wish to lend all the support we possibly can, but I think that he is weak on the funding.
Another omission in the Bill, which we have addressed and hope that the Minister will confirm that there will be time within the limited programme to cover, is the Pitt recommendation of regular maintenance being done and being seen to be done. With regard to the one-in-1,000-years flood that we saw recently in CumbriaI know that one distinguished Member has been directly affected by it as has the Lord Commissioner of Her Majesty's Treasury, the hon. Member for Workington (Tony Cunningham)I hope that the Committee will accommodate our request to have a direct reference in the Bill to the need for maintenance at every level, possibly by the highways authorities. In passing the overall strategy to the Environment Agency, with which we agree, I hope that the Minister will be open to discussing a dispute resolution mechanism and an appeals procedure to avoid the Environment Agencys being seen to make arbitrary decisions.
One of the biggest omissions in the Bill is, I think, a drafting error that can be addressed, so we have tabled some amendments in that regard. It was the wish of the Governmentit was certainly Pitts wishto end the automatic right to connect. The way in which the Bill is currently drafted means that the Government do not achieve that, so I hope that the Minister will look favourably at that and allow time for debate and approval of amendments. He may even wish to improve on the amendments; we are open to discussions on that. There is scope for bringing a real end to the automatic right to connect that has led to so many of the surface water flooding incidents that we have seen in 2000, 2005 and most particularly in 2007. We welcome in-depth debates on a number of clauses, including clauses 9, 36 and 41.
One final omission for which we need to have scope in the programme is mapping. We must address once and for all the co-ordination and sharing of the mapping that we know is being done by many different bodies, including the insurance companies.

Eric Martlew: Thank you. Will Members be more specific about the programme motion? I appreciate that the Minister made a statement, and I am sure that is why Miss McIntosh dwelled a little on matters.

Martin Horwood: I welcome the Bill, but we on the Liberal Democrat Benches feel that it is long overdue, particularly those of us from Gloucestershire. It is no accident, I think, that there are three Gloucestershire Members on this Committee. We have been waiting more than two and half years for this legislation to be introduced in response to the floods that struck us in 2007. The Minister says that he has improved the Bill; he has certainly slimmed it. I know that slimming is good for you, but I am not sure whether that is true in legislation. A fuller and more comprehensive Bill might have avoided some of the criticism that the Select Committee and other commentators have made.
The civil service has produced a Bill that contains only what absolutely has to be done, rather than what could have been done with all-party support. That has led to some notable omissions, of which possibly the most important in current economic circumstances is the omission of any real provision for social tariffs among water customers. That is clearly a problem area for Ofwat at the moment. I sometimes think of Ofwat as an overhang of the high-water mark of Thatcherism, and it certainly seems to disagree with the redistribution of income through water bills, and that seems to be a basic block to social tariffs. If we are to tackle water poverty and look after the interests of our least well-off customers, we should have allowed time to discuss social tariffs within the Bill. I think that we would have had all-party support for discussing that issue.
Secondly, we need time to explore some of the minutiae of the new lead responsibilities at both national and local level that come from Sir Michael Pitts recommendation. It is right to introduce them, but there seems to be growing doubt about how effective they will actually be in practice. We need to explore whether they will be resourced well enough, but also whether they will actually resolve the tangle of responsibilities that so many of us have had to deal with in the aftermath of flooding. The various forms of ownership and responsibility may be obvious to us, but everyone else was unclear as to who was responsible for what in sorting out flooding problems. We need time to discuss that.
Finally, on the environmental front, we need time to discuss whether there is a radical enough shift in the Bill from the rather outdated approach to flood risk and coastal erosion management of basically trying to build stuff to reduce risk, to a more holistic approach that works with nature, the environment and the landscape to try to reduce risk in a more rational and forward-looking way.
Having said that, the need to get this legislation through before the general election is so vital that we probably need to try to achieve those discussions within the programme set out before us, so I am content with the programme motion. It is vital to get the legislation through.

Huw Irranca-Davies: I welcome all the comments that have been made, and I am sure that we will move to the detail of some of those issues in the following evidence session, rather than deal with them now.
I sense some understandable disappointment that this is not a big, all-encompassing Bill. It is a specialist BillI used the phrase Pitt and pithy. It is scaled down to exactly what is required legislatively to deliver now on outstanding elements of Pitt. It does not take into account Cave and Walker. The Government have made it clear that Anna Walkers excellent review, which has some real meat to it, and Caves review need to be considered as entities in themselves, discussed appropriately in Parliament and then taken forward having been given some really good consideration, rather than an attempt being made to bolt them on to the Bill.
I sense hon. Members disappointment. I also would have liked us to have an all-encompassing Bill to debate. However, we have a short Session, so the team of officials and I have tried hard, as was rightly suggested by the hon. Member for Cheltenham, to find those areas that we need to focus on and to deliver the legislation that is statutorily required as a result of Pitt. We have already done much with Pitt that did not have to wait for legislation. The Bill will deliver the remaining outcomes.
It will be necessary to introduce a consolidation Bill, and I have already made clear our commitment to doing so. It will be necessary to deliver on the recommendations in Anna Walkers and Caves reviews, after proper consideration, but this is not the place to do that.
I recognise the disappointment of the hon. Member for Vale of York that we are not having a couple more sittings, although we do have the two evidence sessions. I do not recall having suggested that we have an additional two, four or any other number of sittings. We have always talked about eight sittings plus evidence sessions.
I welcome what the hon. Member for Cheltenham said. I believe that we have an adequate number of sittings, and as the Minister I am certainly more than happy, with the agreement of the Committee and you, Mr. Martlew, to go longer into the evenings and so on in order to get the business done, because we know that our constituents want the Bill on the statute book.

Question put and agreed to.

Resolved,
That, subject to the discretion of the Chairman, any written evidence received by the Committee shall be reported to the House for publication.(Huw Irranca-Davies.)

Eric Martlew: Copies of any memorandums that the Committee receives will be made available in the Committee Room.

Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.(Huw Irranca-Davies.)

The Committee deliberated in private.

On resuming

Eric Martlew: I remind Committee members that we finish at 10.25 am, and I will cut off in mid-sentence anyone who is speaking then.
Minister, perhaps you can introduce your officials?

Huw Irranca-Davies: May I introduce, on my left, Martin Hurst, director of water in the Department for Environment, Food and Rural Affairs, and to my right, Simon Hewitt, divisional manager, who is leading on the Floods and Water Management Bill? We have the full expertise here.

Q 11

Anne McIntosh: I should like to ask you questions on a raft of issues, allowing you time, and allowing other colleagues to put their bids in.
I shall start out of sequence and ask about SUDS. I hope that you would look to put in the statute a clearer definition of SUDS. I have come up with the Scottish definition, which is widely accepted in Scots law. I know that the Department hesitates to refer to urban in the title, but I understand that most SUDS are in urban areas, primarily, relating to large urban developments, the exception being those SUDS along highways. I think it would be clearer if we had a single definitionthat seems to work in one part of the country. There is a great lack of clarity at the moment as to where these SUDS are, how they have been set up, who owns them and who is responsible for maintaining them. I wonder whether the Minister will take an opportunity to say in more depth exactly where we are going on SUDS.
On the automatic right to connect, the Bill places a duty on water and sewerage companies to consult, but it does not give them the right to turn down an application where it is inappropriate and where the existing infrastructure cannot take the new foul water coming out of the new developmentsI think it is under sections 105 and 106 of the relevant planning permissions. Would the Minister look favourably on granting water companies similar rights to the Environment Agency, basically granting it the status of a statutory consultee, so that if a water company says that a new development and the capacity coming out of it will not fit into the existing infrastructure, there will be no automatic connection? At the moment, having read the Bill, I believe we shall get into a mess, because we shall end up with an automatic right to connect, and consistently, over a period of time, additional floods will be caused by that.
At the moment, as I read the Bill, water companies are actually excludedI forget which clause it is under; it might be clause 36from bidding for some of the major infrastructure projects. I should like to understand why they have been excluded. If they come in with the most competitive bid and they are the best equipped to build that infrastructure, I do not understand the reasoning behind the Departments exclusion of them at that time.
On the vexed issue of private drains, I am sure that all colleagues are receiving correspondence from family drainage companies that are currently doing the maintenance on lateral drains and sewers in private hands and are concerned. I think it is the wish of the Committee to allow private drains and sewers to pass into different ownership, but I do not believe we have thought this through entirely. I hope the Minister will consider what is the future for these small companies, and who will be adopting these private drains and sewers. It is probably the water companies who are best placed to do thatto go on and maintain them. That is also the case with SUDS. I know that this is quite controversial for the Minister and the Committee, but I believe that the future ownership of SUDS is best suited to the water companiesthey should be owned by water companies. Has the Minister thought this through? Within all the responsibilities of water companies in the Bill there does not seem to be the regulatory authority for the water companies to go to the market and raise the extra funds between the price reviews. Will the Minister address that point in his summing-up?

Eric Martlew: You have five minutes to speak. You may start to wind up, and if I can get back to you, I will do so at the end.

Q 2

Anne McIntosh: I am most grateful. I would just like to address the issue of bad debt, which is costing water companies, and all of us as their customers, £1.2 billion. Will the Minister extend that bad debt, which is 50 per cent. of some of the bills?
Those are the main points I wish to make. I shall wind up by saying that landowners will be given special responsibilities, but I do not think they have been properly consulted on this. So if not now, during the course of the Bill, will the Minister address what the specific responsibilities of the landowners should be? There is a vexed issue of mapping. The Environment Agency and others are not sharing

Eric Martlew: You are starting to take advantage of the Chair. I call Martin Horwood.

Q 3

Martin Horwood: I have a succession of questions, but I shall try to be as concise as I can. My first question returns to the issue of social tariffs. There is an important provision in the Bill that addresses the rain tax issue and explicitly introduces provision for a concessionary scheme for community groups, which is very welcome in water Bills. Why could we have not made a similar provision for a concessionary scheme or social tariffs for our less well-off customers? That social tariff issue affects a far larger number of people and is a much more important social problem.
That is not to say that we should have put into the Bill all the detailed recommendations of the Walker review, which I appreciate had only just been published and on which I am sure we would all want to see a degree of consultation. However, we could at least have inserted an enabling power for a Secretary of State to try to resolve the issue. Apparently Ofwat has been prevented from allowing organisations, such as Thames WaterI know it is a particular issue for that organisationto introduce a social tariff at all.
The second issue is that the lead responsibility for local authorities seems to be terribly narrowly drawn. In effect, the Bill gives a lead responsibility to local authorities not for flooding at a local level, but only for those specific types of flood that are not covered by the Environment Agency, for example, minor rivers and ground-water flooding. Why not give a lead responsibility at local level for all kinds of flooding, for example, for things such as surface water, in relation to which the actions of local authorities in maintaining or not maintaining watercourses clearly have a major impact on the design of roads and the giving of planning permission? Clearly, those things have an impact and surely local authorities need their responsibility to include an overview at local level of all kinds of flooding. It seems strange to have that demarcation.
Linked to that is the third issue: that of resources. On Second Reading, the Minister said clearly that he thought there would be no additional responsibilities for local authorities that would not be fully funded. The implication was that there would be no additional responsibilities for the Environment Agency either that would not be fully funded. I detect no obvious rush to give extra resources either to local authorities or the Environment Agency. That is a very important context to the Bill. Will local authorities and the Environment Agency get more money to fund those additional responsibilities? If not, how on earth are they supposed to find the money in the current environment?
Fourthly, the LGA argued that, in two-tier areas, the legislation is too narrowly drawn in relation to specifically giving responsibility to the local authority. Indeed, the Bill does not allow local authorities, for example, to collaborate on local flood risk strategies at a local level. In fact, as we know, flooding does not obey local authority boundaries. Is the legislation too narrowly drawn and specific in saying who should exercise that local lead responsibility? Should we not allow local authorities more flexibility?
Finally, the national oversight role of the Environment Agency is an important Pitt recommendation that many of us welcome, but is it clear that we are establishing a real buck stops here responsibility? If, in practice, we have the Environment Agency judging that a local authority, a water company or whoever else is not properly fulfilling their responsibilities and not doing what they should be doingnot managing flood risk or the risk of coastal erosion in the way that they shouldwhat actually happens as a result of the Bill? What powers does the EA have and how would those work in practice? When talking to people at the EA, it becomes a little bit fuzzy about what they would be able to do: it seems suddenly to be more about guidance, and having regard to things, rather than about any national flood risk strategy having any teeth.
Given the time available, I will have to come back to you on the other issues that I have to raise in the main session of the Committee.

Q 4

Roberta Blackman-Woods: Minister, theres much in the Bill that my constituents will welcome, not least the greater co-ordination of flood risk management. One thing that is not mentioned but which affects them is this: residents who live in high flood risk areas sometimes have difficulty getting insurance. I wonder whether your Department is considering or looking at that, even though it is not mentioned in the Bill.
As you know, clause 42 allows water companies to operate concessionary schemes for community groups for surface water drainage. A lot of my community groups have written to me about this, because they are concerned about water charges. Do you think the clause as it is currently formulated gives those groups adequate protection from high charges?
My last point is that the Local Government Association has expressed some concern about a possible shortage of skills in local authorities to deal with the new provisions that they will have to operate as a result of the Bill. Do you think that enough has been done to make sure that adequate skills are available?

Q 5

Chloe Smith: Minister, clause 7 deals with consultation and the national flood and coastal erosion risk management strategy. Can you give us a clear indication of how that consultation will take place, particularly the aspects of public consultation?

Q 6

David Drew: I have three quick questions. First, the balance of the Environment Agency and some local authorities has always been towards funding flood relief with regard to coastal and main river problems. Given the increasing problems with ground water and surface water, how does the Bill move things in the direction of changing the funding stream?
Secondly, in terms of retention of riparian ownership, which some of us are perhaps still worried about, what measures are there, as a result of the Bill, to allow greater enforcement where owners either neglect or refuse to take appropriate action to deal with flooding problems?
Thirdly, again on the draft Bill, which we looked at in the Select Committee, what real teeth will be exposed to deal with encouraging those in ownership of critical infrastructure to have a proper strategy where their current facilities clearly are potentially at risk?

Q 7

Laurence Robertson: In welcoming the Bill, I am concerned about how far it will go towards improving the fight against flooding and towards flood prevention. I am concerned that it does not address a big issue, to me as a representative of Tewkesbury: house building in flood-risk areas.
I have raised the question about PPS25 many times. It does not outlaw building in flood-risk areas. In Tewkesbury, houses that were in the process of being built were flooded. But it is not only the new houses flooding that is a problem: the water displacement is also a problem. As I speak now, there are flooded fields in Tewkesbury. They flood several times every year. If they were to be built on, the flooding situation would be so much worse, and that issue is not addressed in the Bill.
When we were trying to get repairs done to all sorts of waterways, one of the great difficulties was finding out who was responsible for what. Is the Minister satisfied that this Bill identifiesor enables identification to be madewho is responsible for which waterways?
I am also concerned that we start to maintain waterways, and not just involve ourselves in crisis management. When there is a huge flood, we have to go out and make repairs. There was one area in my constituency where a culvert was broken and remained broken for a number of years. There are also two culverts that should have been joined up, but no one bothered to check them. When the floods came, many houses were flooded. So we must ensure that maintenance is carried out; is the Minister satisfied that the Bill will bring that about?
A number of people in Gloucestershire lost their mains water supply for up to three weeks. I want to ensure that that does not happen again and that if we have a problem, an alternative supply can be used. The situation I mentioned almost became much worse. It was not just that some people lost their electricity supplies, but the entire county came very close to losing its electricity supply during that time. I want to see the Bill address that particular issue.
Finally, I understand that there will be separate flood risk management schemes for Wales and England. Given Tewkesburys position and its rivers, it suffers from water that starts off in Wales and comes down to it. I am not in any way blaming the Welsh for that, but given that there are separate flood risk management strategies, who acts as the referee when there is a conflict, or when England suffers from something that is decided in Wales?
I welcome the Bill because it at least gives us a chance to discuss such issues, but there is a need to strengthen it if we are to achieve what Mr. Horwood says about the buck stopping here. Who is responsible not only for clearing up the mess when flooding happens but for doing everything that can be done to prevent it from happening in the first place?

Q 8

Nia Griffith: On the subject of cross-border issues, there has sometimes been criticism that legislation affecting England is passed but the necessary work is not then done in Wales for some considerable time. In this Bill, we are talking about requirements on Ministers, clauses that require Welsh counties to do things, and issues such SUDS which may cross the border. We also have a difficulty in that sometimes we refer to Welsh Water and Severn Trent areas rather than the geographical border between England and Wales. What detailed discussions have taken place with Welsh Assembly Ministers to ensure that we do not have a situation in which there are anomalies on either side of the border? I am referring in particular to areas like the River Severn and the Severn estuary.
The other area that seems to be in some doubt is the requirement to adopt the private sewers, and what this Bill requires to happen in Wales and what is up to the Welsh Assembly to require to happen in Wales.

Q 9

Jamie Reed: May I thank the Minister for the help that he gave to all of us in west Cumbria during the recent floods? In welcoming this Bill, I have to say that it is not necessarily for disastrous flooding, butand quite rightlyfor everyday flooding that blights so many lives and communities up and down the country. Information sharing is the key, and I welcome the intentions of the Bill to address that. Will the creation of the risk management authorities genuinely facilitate that? In any kind of organisation or series of organisations, when dealing with any kind of issue, a controlling mind is needed that understands all the risks that are posed. That is particularly true of flooding. Will risk management authorities provide that?
Secondly, the Bill asks a lot of local authorities. As with all Bills that do that, the principle is fine but the practice can be extraordinarily difficult. As I have said on a number of issues, too many local authorities up and down the country are frankly terrible in many ways and on many levels. It may even be that inadequate or incompetent planning, building inspection, building control and other local authority functions over many years have contributed to the regular flooding problems that we face. How can we be sure that every local authority has the necessary competence to fulfil their functions under the Bill? That is an important question.
We have discussed my final point in detail before and I mentioned it on Second Reading. What are the financial obligations with regard to flood prevention on water companies? There is a widespread view in my community and in many other communities that I have talked to that since the privatisation of the water utilities, the water infrastructure and drainage networks in this country have deteriorated rapidly. This is not an ideological point. We used to have water boards, water houses, water authorities and water engineers. The rooms of maps have gone and the knowledge has gone with them. What financial obligations are we seeking on water companies to help fund the rapidly deteriorating water infrastructure network? I think that there should be such financial obligations.

Eric Martlew: Three Members have indicated that they wish to ask questions. If we hear those questions and the Ministers reply, we will hopefully have time for supplementaries. That will be to the advantage of the Committee.

Q 10

Angela Watkinson: In flood emergencies, such as we have seen recently, a number of statutory bodies will be in attendance. It is important that it is acknowledged beforehand which of those statutory bodies has overall strategic control and co-ordination of everything that is going on. I know that the fire and rescue service feels it should have that role. Will the Minister assure me that the fire and rescue service will be fully consulted in the Environment Agencys consultation on setting up the flood risk management strategy?

Q 11

John Grogan: I have just two questions. Clauses 22 to 25 reconstitute regional flood defence committees and add a coastal aspect. Are Ministers satisfied with the current operation of regional flood defence committees? I think that they are making a big contribution. Will Ministers use the powers of the Bill to maintain the current structures of regional flood defence committees, whereby local authorities have a majority and choose their own representatives, or will Ministers choose representatives for them? There is a fear that there could be a centralisation of power and that a system that works quite well will be replaced by one under which the man from Whitehall knows best.
Regional flood defence committees currently have to approve the regional programme of the Environment Agency. It is a good check on such a large organisation that it has to go to a committee, not unlike this one, and justify to local councillors its local priorities and programmes. I understand that under the Bill, the committees will have an advisory role rather than a role of approving the programmes. Is the situation not best left as it is? Is there any evidence that it does not work or that regional flood defence committees are a brake on prevention schemes? If the system does work, is it not a vital local input into the system? Is it not best left as it is, apart from adding the coastal element?
What is the precise logic of giving responsibility for the SUDS to the local authorities rather than the water companies, which would argue that they have the engineering expertise that local authorities have in many cases long since lost?

Q 12

Andrew Turner: My question is similar. On the Isle of Wight, there is no influence from anywhere on the mainland. Will we have the control and independence to make decisions there without referring them to someonewhoever it might beon the mainland?

Huw Irranca-Davies: I will do my very best to answer this huge range of questions. I might bounce about a bit because of that range. First, let me deal with the crucial impact of local authority funding, which several Committee members have mentioned. We have made it clear that we are absolutely committed to funding any new net burdens that arise from the Bill, and we will keep the costs and assumptions under review. This is not a matter of one space and time, drawing a line under it and saying, Here are the costs for ever and a day. We will keep everything under review, including the assumptions that underpin our calculations, and address any shortfalls that arise.
The assessment of new buildings is based on the upper end of cost estimates and the conservative end of savings assumptions, which gives us added confidence that the burdens will be fully funded, but I repeat yet again that we will keep this under review. An extra £36 million a year will be set aside, to be provided from the commencement of the Bill, to lead local flood authorities, distributed via the area-based grants mechanism. This will allow local authority-led flood management activity to triple from the current £18 million a year to £54 million a year. In additionthis has not been much remarked onthere is an £8 million contingency fund within the sums for year one, to get the process going.
A couple of hon. Members have mentioned sewers, in terms of both the transfer, which I will talk about in a moment, and the funding, which ties in to this. The transfer of the private sewers is an important issue, because transferring them to water companies will relieve local authorities of activity that they have traditionally, historically done on behalf of home owners. This is conservatively estimated at £50 million a year, and it is worth pointing out that local authorities were among those calling for the transfer to take place.
Why do I say that estimate is conservative? Because Ofwat says it expects the transfer to cost water companies £133 million a year, plus £1 billion needed to solve legacy issues. The £50 million estimate is based on the best available evidence from a sample of local authorities themselves. Yes, the sample was taken in 2002, before the potential transfer could have significantly affected the level of local authority activity. A more recent surveywhich I know some people have talked aboutor even one conducted now would not necessarily provide a better picture of historical levels of activity. In fact, it could be prejudiced by knowledge of the intended transfer. There is some evidence that some authorities have been cancelling contracts and minimising costs until transfer takes place, so a snapshot now would not be a true reflection of the costs.
While we accept that there will be some savings, the LGA has not yet offered an alternative assessment or suggested a way of overcoming the difficulty. We are committed to keeping this under review and meeting any new net burdens. It is also worth pointing out that accounting for the transfer will affect the relevant part of the local authority funding settlement by less than 1 per cent. The £8 million contingency fund in year one, which has not been much remarked on, means that private sewer savings could be 20 per cent. lower and burdens would still be fully funded in that year.
The other crucial aspect is SUDS. In the terms of adoption, we commit to funding SUDS in full, with the long-term options being reviewed. The duty to adopt SUDS will be funded, whichever way we do it. We undertake to publish a clear way forward that takes account of the circumstances faced by local authorities and developers as well, in time for implementation of the legislation set out in the Bill, so that the measures are in place at that time to allow local authorities to implement SUDS in full, in the certainty that there will be no gap in funding. I know that we will return to this in Committee, but we are confident in where were are, currently, on our calculations and we also want to make it clear that there are commitments to meet the net burdens and to review it as time goes on.
I will have to flick back and forth through my papers, I am afraid. My apologies if I do not take the points in the order in which they were raised. Mr. Grogan mentioned the regional flood and coastal committees. We have no intention of centralising appointment-making to the RFCCs. The new advisory role, with the executive role on levies, reflects current practice, which I think is what Mr. Grogan was pushing at, now that most funding goes through the local authoritybut not the current legislation. So there is no intention that the Bill will centralise anything in that regard. I think that I am correct in stating that those local committees will have the majority of local authority members there.
Mr. Grogan also asked where SUDS logically sit. I know that some water companies have been saying that they might want the responsibility given to them. There are a couple of reasons behind this, including the clear Pitt recommendation for simplicity and streamlining of accountability. If we are going to deal with all aspects in the Bill, including ground water, which was mentioned earlier, all aspects that impinge on the risk of flooding are pertinent to the local authority and the Environment Agency roles, ground water included. We will return to this during Committee sittings, when I will refer to specific clauses, but in terms of SUDS, which impact on flooding as well, we see it sitting logically, in line with the Pitt recommendations, there with the local authority function, because there are aspects of the other delivery parts of local authorities, such as planning and highways, that are already within the local authorities. So, for our money, it is clear and straight where the responsibility should be.
We understand that there is some rationale behind the water companies saying, Give it to us, because we can take this big area view and we have expertise, and so on. The Bill doesnt determine what expertise is used to deliver it: it says that the accountability has to be clearly there at the local authority level. In terms of local authority capacity, this is a real issue. Thats why we have not waited for the Bill to move forward on Pitt recommendations. This year we have funded 22 places for local authority skills and training to develop the capacity, and there is more to come. That training is going well. I hope to visit the training facility myself shortly. I think that the LGA has welcomed our putting the money into that capacity, and the local authorities are supporting it.
Returning to SUDS for a moment, the provisions on SUDS deal with surface water, not foul water, so where a surface water connection is needed, approval is required from the SUDS approving bodyfrom the advisory board. Drainage designs must meet national standards, including the impact on sewers. We are looking to avoid connection to the sewer first. Water companies are statutory consultees to the approval process, under section 11(3), so they can advise if there are sewer capacity issues. We want to see the presumption being not to have the connection to sewers and to work backwards from there.
It is not just an urban matter, of course. Thats why we dont want to adopt the Scots definition, which perhaps works in a Scottish context and focuses on sustainable urban drainage. Actually, this issue will affect urban, urban periphery, urban rural, pure rural and all aspects as well. So that is why we are not inclined to go down the route of a Scottish definition. Again, I am sure we will return to this in Committee sittings. It is actually quite a narrow definition, curiously, and we see it as a wide one.
It is worth mentioning that existing SUDS are not widespread, which is why we are proposing new provisions for the approval and adoption of SUDS. Where they do exist, local authorities usually adopt, but they have no duty to do so. Now they will have a duty to do so and will be funded. The water and sewerage companies can adopt SUDS now, but they do not. In recent consultations, and in earlier ones about who should adopt, most water and sewerage companies and local authorities thought that it should be the local authorities, because it sits with highways, public space and maintenance.
With regard to Mr. Horwoods question on the local authoritys role in flooding, Clause 9 sets out that a lead local flood authority will be responsible for three areas:
surface water runoff,...groundwater, and...ordinary watercourses.
Those are the types of flooding that can be managed at a local level, and for which there is simply not clear responsibility at the moment. We would expect, and have made it clear consistently, that all authoritieslocal authorities and othersshould be working together in local partnership to make this work. In fact, it will be difficult in general, not least in the current economic climate, to see a way of doing that that avoids duplication and reinvention but draws on the current expertise to deliver the most efficient way forward on flood risk management.
There is an issue of the buck stops here in the way that we have designed the Bill. The risk management authorities must act consistently and there is a ministerial power for direction. To answer the question on where the buck stops beyond that, there is a ministerial power for direction within clause 20, so if authorities are failing, and not just local authorities, ultimately the buck stops with the Minister, which is quite right in a democracy.
Mr. Robertson rightly mentioned cross-border issues, and it is good to see Members from across the UK take an interest in that, including those from Wales and the border areas that have had a lot of flooding. Tewkesbury, of course, is on the Severn, which is a main river, so I apologise for the water down there flowing off the Cambrian hills and elsewhere. The Severn, of course, is managed by the Environment Agency, which supports both the UK Government and the Welsh Assembly Government. It talks to both and we talk to each other as well.
To address the point raised by Ms Griffith, at both the official level and the ministerial level, the point we have reached in the Bill, and what is reflected in the Bill, is the result of regular interaction and dialogue with the Welsh Assembly Government and others. That is reflective of a combined position. You are right that there needs to be that level of co-ordination, both at a local level and a higher strategic level, with the Environment Agency, and at a ministerial level as well, because that is the only way we will ensure that cross-border issues are resolved.
Mr. Drew raised the vital point about critical national infrastructure, and we have not been waiting around on that. It is worth pointing out that since 2007 that is one of the aspects that does not require primary legislation, because the natural hazards team in the Cabinet Office was created in May 2009 in order to co-ordinate activity right across Government and ensure that the appropriate measures of resilience are put in place across all the different sectors. The Cabinet Office has screened nearly 1,000 critical national infrastructure sites for flood risk and identified nearly 200 across the nine sectors of national infrastructure that are in areas that could flood, either from rivers or the seas. The lead Government Departments are, as a result, preparing a sector resilience plan for each sector to understand the vulnerability of those 170-odd sites from flooding and identify what actions are needed to improve resilience.
It is worth saying that that is not the only work that has been going on. In fact, since 2007, temporary flood defences have been erected around the Mythe water treatment works in Gloucester, so there has been reinforcement there. We did notwe could notwait for that; we had to go ahead and do it. We have improved flood defences in east Hull and west Hull sewerage pumping stations and at the Hull waste water treatment works. New flood defences have been installed at the energy substation in Carlisle, following the flooding in January 2005. Humberside police have invested £870,000 in flood defences for police headquarters. If it is helpful, I will write to Committee members with a list of some of the work that has been done, because there is too much to mention now.

Eric Martlew: That is helpful.

Huw Irranca-Davies: The work is underpinned by the work going on in the Cabinet Office as well.
On Mr. Horwoods remarks about the social tariff issue, which I know we have discussed in some detail, he makes the valid point that what we have tried to do in the Bill is find areas for which there is, by and large, very good supportalthough we might have discussions to have over funding, burdens and so on. We think that, within a short Session, we can go ahead and do thiswe need to legislate on the issue.
We know that we are going to have to deal with all aspects of the Anna Walker review. We know that we have yet to deal with the aspects raised by Cave, and with the issues of competition and innovation within the industry and so on. We are going to have to do that. We know that we have a consolidation Bill coming down, so we tried to identify in the Bill those areas that we can move ahead with rapidly and proceed with after some collaboration and discussion. On social tariffs, I agree with your point in that I suspect there is broad agreement around the idea of having something linked to social tariffs. But within Anna Walkers report, she deals with a huge complexity of issuesnot only social tariffs, but also metering, affordability, what the DWP can do and so on.
We made it clear that although we welcomed Anna Walkers report, we would want to deal with it as an entirety and also give others the opportunity to respond in full to it, rather than rush ahead with one or other aspect. You may well be right, Mr. Horwood, in that there is broad agreement around some broad idea on the matter, but we would prefer to bring forward something that is coherent and that reflects the complexity of the issues that Anna Walker has shown. But it will be a good debate to have because we need to do something on the matter. I am just not convinced that this is the right Bill to do it in, right here, right now.
On the issue of collaboration, one of the things we have learned since the draft Bill and in our discussions with the LGA and others in the internal drainage boards and so on is the need to make clear and explicit within the Bill the need for collaboration. There is a need to avoid duplication and to avoid building whole new mechanisms. There is nothing in the Bill to prevent that collaborationin fact, everything in here is geared towards encouraging it. I know that we will explore that further as well.
Just to make the issue relating to Ms McIntoshs point and Ms Griffiths point on private sewers clear, because I know that outside the Committee some people have remarked to me that it is great to see the transfer of private sewers happening within this Bill, the transfer of private sewers, of course, is not happening within the Bill, but the funding aspects of it are pertinent to the Bill. There will be opportunity to enact that transfer and we have already made it clear that it will happen in 2011.
On the aspect of Wales, as Ms Griffith will know, there is always an opportunity for the Welsh Assembly Government to look at what we are doing, to reflect and then bring forward their own approach to it. That is what they will do with this. We have made our view on the transfer of private sewers clear. I do not want to reveal before Welsh Assembly Government Ministers do so what their view would be on that. But I know it is as important an issue for her constituents and for my constituents as it is for Ms McIntoshs constituents or for Mr. Drews constituents and others. So Welsh Assembly Government Ministers have been involved in all the deliberations around this so far. We have kept them involved with our way forward on this. It can be done, but it is not within the Bill. They will have to make their own views on that known, but I am sure they will have heard what you have said in this Committee as well.
May I return to the issue of insurance that was raised by Dr. Blackman-Woods and others? We have in place at the moment an agreement that was a well worked, co-operative agreement with the Association of British Insurers and its members. It provides for pooling of insurance, and for flood protection in areas of flood risk where the ABI can see either that the Government, their agencies and local authorities have stepped up to the mark and provided flood defence or, alternatively, that it is in the pipeline within the next five years. It is worth remarking that we have more than doubled our investmentI cannot remember the exact figurein flood defence over the past few years, and that we have realised that that investment will have to increase in the light of our projections on flooding, climate change and so on.
At present, we have a good, constructive and positive working relationship with the ABI and its members to provide insurance. Mr. Horwood and I have had discussions about what needs to be done. The point is often madeI hear it when I go to Hull and even areas in the Lake district that have recently been floodedthat, yes, people have insurance, but the premium or excess is through the roof. The agreement recognises that this is risk-based insurance business, and that, even if the Government step up to the mark and say that they will provide one-in-100 flood protection, the risk to property without proper resilience and so on could still be significant. The industry has to reflect that in what it decides.
However, there is more work to be done. We set up the agreement in 2008 and it runs until 2013. It is not part of the Bill, but there will certainly be a timely opportunity for us to sit down with stakeholderspeople who have been affected by flooding, local authorities, the Environment Agency and the insurance industryto take stock and look at where we are post-Cumbria, post-2007. How well is the agreement working? I think that it is working well but that there are glitches. How do we iron out the glitches? What do we need to do to do that? Can more be done with pooling of risk? Can more be done on the size of premiums and so on? All of that must be predicated on the basis that the insurance industry in this country is risk-based, unless we fundamentally alter it. There is work to be done on this matter, and perhaps the Committee will want to discuss that, and how we take stock of where we are, on the back of the Cumbrian floods as well.
I have dealt with some of the points that Mr. Drew raised. He asked about ground water. I cannot remember off the top of my head the part of the Bill that refers to it, but the Bill deals with all aspects of flooding: ground water, surface water and whatever contributes to flooding. Subsection (2) of clause 9, which deals with local flood risk management strategies in England, states:
In subsection (1) local flood risk means flood risk from...surface runoff...groundwater, and...ordinary watercourses.
Anything that results in a risk of flood will be covered in the Bill.
I am leaving to the endnot for a deliberate reason, I assure youan aspect relating to Wales. I did not want to be fingered and told that, as a Member for a Welsh constituency, I was suddenly jumping on to it. I have dealt with the cross-border issues, but I simply wanted to raise one more point in respect of Wales.
I mentioned the collaboration with the Welsh Assembly Government, who welcomed Sir Michael Pitts review and undertook to consider and assess its appropriateness to Wales. The assessment of the review was completed in December 2008, and the findings were that the risk management approach in the Bill is consistent with their New Approaches programme, which is part of their environment strategy.
Just touching on surface water drainage, to expand a little here, in Wales the surface water drainage task is being led by the Wales Integrated Surface Water Management Group, which includes representatives of the Environment Agency, the Welsh Local Government Association and Dwr CymruWelsh Water. That group has completed an initial mapping project to identify surface water flood risks across Wales and information has been sent already to emergency co-ordinators and local resilience forums. But I am happy to get into more discussion on the Wales aspects because they are taking forward individual property grant schemes in Wales, as we are in England. They have produced a report on coastal erosion and tidal flooding which ties into this and the sustainability committee in the National Assembly for Wales has been looking at this as well.
I am sure Ive missed something.

Eric Martlew: You have done very well. You deserve a bit of a rest, so I am going to ask for short supplementary questions.

Q 13

Anne McIntosh: I congratulate the Minister. I have one final question. I was a little concerned that you almost breached the spirit of good will among colleagues on the Committee by publishing without a proper consultation the Flood Risk Regulations 2009. I know that you have a legal obligation to implement the EU floods directive, but as it is a core part of the Billmost particularly clause 9what scope will there be for us to examine those regulations in the context of that clause? Will the Chairman allow us to go into some detail on that because it goes to the heart of the local flood risk management strategies?

Q 14

Martin Horwood: I want to come back on one issue, which is that the local flood risk management strategy is too narrowly drawn. Despite what the Minister says, there is still an issue here. In Tewkesbury and Gloucester they had scenic flood water rising gently from the rivers. In Cheltenham, Cockermouth, Sheffield and other places there was a much more violent experience, which I guess you might have had too. Torrents of water came down what are normally streets and roads. Water flooded everywhere across the town: some of it came out of watercourses, some out of drains, some from burst water mains and some from surface water. It is pretty difficult when you are in that situation to work out whose water it is. In practice, you want a local authority to be able to address the issue of where all that water goes and how a locality will manage in an extreme situation.
My worry about clause 10 is that it is so specific in defining local flood risk as only surface run-off, ground water and ordinary watercoursesin other words, small watercourses that do not count as main rivers for the Environment Agencys purposesthat it almost prevents local authorities from addressing flooding in the round. That seems nonsense when it is impossible to demarcate the water itself in that way, especially in the kind of extreme event that we experienced in Cheltenham and which they have had more recently in places like Cockermouth.

Q 15

Laurence Robertson: To take up that point, a lot of our flooding did not come from rivers. Some did, but a lot came from drains that were not working properly. It came from green fields being taken up by housing which should not have been built there. One point the Minister did not manage to touch on was the building of houses in the wrong places. He got through many issues, which I congratulate him on, but he did not reach that one. But Mr. Horwood makes a very good point. We had rivers running down roads and not just in one area and not only in July 2007. We have had it at other times as well. It is a very real problem.

Huw Irranca-Davies: Let me first deal with Miss McIntoshs point and the EU floods directive. I would agree that in an ideal world we would have wanted to come forward with that all-encompassing Bill and had an enormous amount of time for discussion and debate. But in our defence, we consulted on the provisions to implement the EU floods directive in clauses 50 to 63 of the draft Flood and Water Management Bill. We had feedback on that, so we had input to go on. We received nearly 650 responses, which are summarised on the DEFRA website. That is a very good website and I recommend it to everybody, not least for our up-to-date blogs and so on. The EFRA Committee also scrutinised the draft Bill and made its own comments on it.
Specific reference was made to the regulations in the written ministerial statement on 19 November when the Flood and Water Management Bill was introduced, and the Government response to the EFRA Committee report and to the consultation was published then. I recognise what the hon. Lady says in that, if we had followed a different route, it could have been a bigger opportunity. The point, however, is that that would have taken more time. All interested parties, including Parliament, have had an opportunity to scrutinise our plans for transposing the directive. Laying the regulations on the day that the Bill was introduced provided an opportunity for each one to be considered by the House of Lords Merits of Statutory Instruments Committee, and officials also provided it with clarification. We took that opportunity.
We had a couple of options in terms of how we could progress, having been clear on the necessity to put the Bill into a lean and mean shape that delivers exactly what we want. We also looked for other opportunities in relation to whether there are things that we can do in different ways. This was one, but there was the opportunity to have input.
I have not dealt with another couple of points. On Mr. Drews point, water and sewerage companies currently have duties on flood prevention under section 94 of the Water Industry Act 1991. They are not expressly included in the Bill, but we will consider doing that by order under clause 4. Until then, the duty to co-operate will apply in relation to having regard to local and national strategy.
Miss Smith askedplease accept my apologies; this got lost in my notes, because the point was made towards the endhow the consultation for the national strategy will take place. DEFRA and the Environment Agency comply with the Governments standard guidance on consultation, so we would expect consultation on the national strategy, as with others, to follow a similar pattern to this Bill with a full 12-week period of public consultation.
Mr. Robertson raised a point about the responsibility for waterways. The lead local authority has a duty to investigate under clause 19. Ordinary watercourses would come under districts and IDBs, as appropriate, and the main rivers under the Environment Agency.
You also raised the issue of planning policy on flood-risk areas. I have a bundle of things to say on that. We have strongand it has got strongerplanning policy in place that ensures that the flood risk is properly assessed and taken into account by the local planning authorities. We have to be clearand I hope, because of the guidance, that local authorities are also clear on thisthat the aim should always be to locate development away from flood risk wherever possible. Those two words are important. We have to accept that there are large areas of the country at risk of flooding and that, in some areas, a disproportionately high part of their region is at risk of flooding.

Eric Martlew: Minister, you have one minute.

Huw Irranca-Davies: My point is that we simply cannot ban all new development. As a Minister, I am not prepared to write off or blight whole communities, such as the whole of Hull, two-thirds of Portsmouth, most of London and the east of England, which are all in areas of high flood risk. The issue is how we provide the homes and development that we need and reduce flood risk. We need to ensure that, wherever possible, we build where it does not flood, and that, where we do have to build in high flood-risk areas, it is as safe and as flood-proof as possible.
I have not dealt with riparian ownership.

Eric Martlew: Order. We have run out of time. I am sure that you can have a discussion afterwards with Mr. Horwood on that point. Thank you, Minister.

The Chairman adjourned the Committee without Question put (Standing Order No. 88)

Adjourned till this day at One oclock.